In November 1998, California voters passed​ Proposition 10, the “Children and Families Act of 1998" initiative.  The act levies a tax on tobacco products to provide funding for early childhood development programs. Revenues generated from the tobacco tax must be used to enhance the early growth experiences of children, enabling them to be more successful in school and ultimately to give them an equal opportunity to succeed in life. Revenues must be used for the following specific purposes:

• To create a comprehensive and integrated delivery system of information and services to promote early childhood development;
• To support parenting education, child health and wellness, early child care and education, and family support services; and
• To educate Californians on the importance of early childhood development and smoking cessation.

Tobacco tax revenues are collected at the state level. Eighty percent of these funds are then allocated to the 58 counties according to annual birth rates. The remaining 20 percent of the money is allocated to First 5 California to support statewide programs, research, and media campaigns. Statewide First 5's are the largest investor in early childhood programs ($2 billion in 20 years) However due to smoking prevention efforts, this tobacco tax is a declining source of revenue and therefore the Prop 10 allocation diminishes each year.

In Sacramento County the annual birth rate is approximately 20,000 and First 5 Sacramento's Prop 10 annual allocation is approximately $11 million. This funding provides innovative preventative child development and programs and services. Since our inception First 5 Sacramento has invested $318 million into Sacramento County through our community partners​.​​​